The seven stages of a deal
Every VC deal, from a $250k pre-seed check to a $30m Series B, moves through the same seven stages. This lesson is a map, not a deep dive, every stage gets its own lesson (or several) later in the course.
- Sourcing (Lesson 5): finding the company before, or at the same time as, everyone else.
- Screening (Lessons 6-12): forming a thesis and evaluating team, market, product, and traction.
- Term sheet (Lessons 14-15): agreeing price and structure, non-binding but rarely walked back from.
- Diligence & close: legal, financial, and reference checks; wiring the money.
- Board & support (Lessons 19, 28): sitting on the board, helping with hiring, intros, and follow-on rounds.
- Follow-on decisions (Lessons 22-23, 29): deciding whether to invest again in every subsequent round.
- Exit (Lesson 32): M&A or IPO, the point capital actually returns to LPs.
The stretch between stage 1 and stage 3 typically runs 2-6 weeks in venture, far faster than the months a PE deal takes, because the company being evaluated is small enough that a thorough read is possible quickly. The stretch between stage 5 and stage 7, by contrast, is the part that takes years, often the bulk of the fund's 7-10 year life.
| Stage | Typical duration | Who leads it |
|---|---|---|
| Sourcing to term sheet | 2-6 weeks | Deal partner |
| Term sheet to close | 2-4 weeks | Deal partner + lawyers |
| Board & support | Years, ongoing | Board partner |
| Follow-on decisions | Recurring, every 12-24 months | Board partner + investment committee |
Checkpoint
- The seven stages: sourcing, screening, term sheet, diligence & close, board & support, follow-on decisions, exit.
- Sourcing to close is fast, weeks not months.
- Board to exit is slow, years, and is where most of the fund's life is actually spent.
If anything here still feels unclear, ask before moving to Lesson 4.